Rules Amending the Bankruptcy and Insolvency General Rules (Public Post-Secondary Educational Institutions)

Canada Gazette, Part I, Volume 160, Number 46: Rules Amending the Bankruptcy and Insolvency General Rules (Public Post-Secondary Educational Institutions) November 14, 2026 Statutory authority Bankruptcy and Insolvency Act Sponsoring department Department of Industry REGULATORY IMPACT ANALYSIS STATEMENT (This statement is not part of the Rules or the Regulations.) Issues The Fall Economic Statement Implementation Act, 2023 (Bill C-59), among other things, amended the Bankruptcy and Insolvency Act (BIA) and the Companies’ Creditors Arrangement Act (CCAA) [collectively, the Acts] to exclude prescribed public post-secondary educational institutions (PSEIs) from becoming subject to insolvency proceedings. More specifically, sections 273 and 274 of Bill C-59 amended both the definition of “corporation” in the BIA and of “company” in the CCAA to specifically exclude those public PSEIs that are prescribed by the Bankruptcy and Insolvency General Rules (BIGR) and the Companies’ Creditors Arrangement Regulations (CCAR). The proposed amendments to the BIGR and CCAR would give effect to Parliament’s direction under Bill C-59 by prescribing the public PSEIs to which sections 273 and 274 would apply. These provisions, which came into force on June 20, 2026, reflect Parliament’s recognition that insolvency frameworks designed principally for private-sector entities may not adequately protect the important public-interest functions of public PSEIs experiencing financial distress. By excluding prescribed public PSEIs from proceedings under the BIA and CCAA, the regulations would support the preservation of essential programs and services and encourage governments, institutions and other stakeholders to develop preventative solutions to financial distress. Background Canada’s insolvency system Bankruptcy and insolvency law in Canada falls under federal jurisdiction, and the federal government has exercised its authority through two main statutes: the BIA and the CCAA. The BIA offers debtors, both individuals and corporations with at least $1,000 in liabilities, various filing options to manage debt, including bankruptcies, receiverships and proposals. The CCAA is only available to corporations that have liabilities over $5 million and acts as a method for corporations to review their finances with the goal of restructuring their business under court supervision rather than closing it altogether. Proceedings under these Acts are designed to provide a “fresh start” for the honest but unfortunate individual debtors; balance competing interests among creditors, with equitable treatment of similarly situated creditors; provide certainty, transparency, efficiency, and impartiality; and encourage restructuring over liquidation of businesses where viable, to preserve enterprise value and employment, and to provide better recovery for creditors. Treatment of public post-secondary educational institutions Sections 273 and 274 of Bill C-59 sought to ensure that insolvency frameworks designed principally for private-sector entities could not be used by public PSEIs experiencing financial distress. However, no public PSEIs have yet been prescribed under the BIGR and CCAR, leaving the exclusion enacted by Parliament without practical effect. Without institutions being prescribed, public PSEIs in financial distress could continue to commence proceedings under the BIA and CCAA, and creditors could continue to initiate proceedings against them. This continued use of commercial insolvency frameworks could put the preservation of essential programs and services at risk and reduce incentives for governments, institutions and other stakeholders to develop preventative solutions to financial distress. Bill C-59 legislative amendments In 2023, the Government engaged with provinces and territories (PTs) and other stakeholders on how to best protect the public interest in PSEI insolvency and restructuring situations. In June 2024, Parliament enacted Bill C-59 to amend the Acts to exclude prescribed public PSEIs from being subject to insolvency proceedings. In practice, the legislative amendments prevent prescribed public PSEIs from commencing insolvency proceedings and their creditors from forcing them into similar proceedings under the Acts. The objective of the amendments was to encourage early dialogue and negotiation to promote PSEIs’ financial stability and reduce their insolvency risk, instead of PSEIs initiating urgent insolvency proceedings under the Acts. Context and rationale for prescribing public PSEIs The Government chose to define public PSEIs through regulations rather than in the Acts because there is a broad variety of public PSEIs across Canada, and PTs have jurisdiction over post-secondary education. Developing the definition or list through a regulatory process allows for input from both PTs and other key stakeholders. Objective The objective of the proposed Rules Amending the Bankruptcy and Insolvency General Rules (Public Post-Secondary Educational Institutions) and the proposed Regulations Amending the Companies’ Creditors Arrangement Regulations (Public Post-Secondary Educational Institutions) [collectively, the proposed regulations] is to amend the BIGR and the CCAR to prescribe the public PSEIs that are excluded from becoming subject to insolvency proceedings under the Acts. Specifically, the proposed regulatory amendments aim to ensure clarity and predictability for institutions, creditors, insolvency professionals, governments and other stakeholders; align the BIGR and the CCAR with PT legislative frameworks, which define and govern public post-secondary systems; ensure that the BIGR and the CCAR remain as accurate and current as possible when PSEI-related PT legislation is amended; and ensure appropriate inclusion and exclusion of institutions in a manner that supports the effective functioning of the insolvency system. Description The proposed regulatory amendments would incorporate, by ambulatory reference, each PT’s post-secondary statutes and related regulations, schedules, or other legal instruments that establish or govern PSEIs (the PT legislation). More specifically, a new schedule would be added to the BIGR and to the CCAR, listing the PT legislation incorporated by ambulatory reference to identify the institutions that would qualify as public PSEIs. Depending on the nature of the legislation incorporated by reference, the method used to identify the public PSEIs will vary. For example, for PT legislation governing multiple institutions, reference will be made to definitions within an act (e.g. “colleges” or “universities” as defined by the specific PT legislation) or to a list of institutions provided for in that PT legislation, and for PT legislation governing, establishing, or applying to a specific institution, reference will be made to the institution that is the subject of the legislation. Under the proposed approach, the amended BIGR and CCAR would capture community and other public colleges, public universities and other public PSEIs, but would not include private PSEIs nor would they impose any specific obligations on public PSEIs. Regulatory development Consultation The Government first consulted PTs and other stakeholders in 2023 in the lead-up to the legislative amendments in Bill C-59. Faculty and student unions strongly supported excluding public PSEIs from becoming subject to insolvency proceedings under the Acts, whereas insolvency professionals, university administrators, and some experts cautioned against such an approach, particularly in the absence of an alternative insolvency regime. Parliament ultimately opted for an exemption without establishing a separate federal insolvency mechanism, with a view to promoting early provincial and territorial intervention and resolution. Consultations on the proposed regulatory amendments took place between 2024 and 2026. In the summer of 2024, the then-Minister of Innovation, Science and Industry wrote to PT counterparts in higher education regarding possible approaches to prescribing public PSEIs for the purposes of the Acts. Innovation, Science and Economic Development (ISED) officials also received input from faculty unions, lenders, insolvency professionals, and university administrators throughout this period. Stakeholders generally supported the proposed regulatory approach, despite mixed views on the underlying legislative amendments. Faculty unions emphasized the importance of ensuring that all public PSEIs were covered by the regulatory approach. Insolvency professionals, experts, and lenders had mixed views on the broader policy of excluding certain types of institutions from insolvency proceedings but emphasized the need for the regulatory approach to provide clarity for market participants. Representatives of university administration expressed the strongest opposition, urging the Government to delay enacting regulations removing access to the CCAA and BIA until an alternative sector-specific restructuring framework is in place. In the winter and spring of 2026, further PT input was sought regarding the technical aspects of PT post-secondary legislative frameworks and the accuracy of the legislative references to be incorporated in the BIGR and the CCAR under this approach. Responses were received from the seven most populous provinces, the majority of which supported the proposed approach and provided comments regarding the accuracy of referencing the identified definitions and pieces of legislation. To the extent there was opposition, it was to the overall policy of excluding public PSEIs from becoming subject to insolvency proceedings, rather than to the specific regulatory approach. The overall policy was decided by Parliament and, therefore, cannot be addressed in the context of the regulatory proposal. Indigenous engagement, consultation and modern treaty obligations The proposed regulatory amendments are not expected to engage modern treaty obligations. Indigenous institutes, such as those operating under the Indigenous Institutes Act, 2017 in Ontario, would not be captured by the proposed regulations; their governance and accountability framework would remain unchanged. The consultation process included outreach to Indigenous stakeholders; one student group participated in the roundtables. Instrument choice Regulatory amendments to the BIGR and the CCAR are required because this is the only legal method to prescribe public PSEIs and implement the Bill C-59 amendments. Without regulations, no public PSEI would be prescribed, and financially distressed PSEIs would remain subject to insolvency proceedings under the Acts. This would undermine the purpose of the legislative amendments. The following three approaches were considered in the context of these proposed regulatory amendments. First, a broad or descriptive definition of “public PSEI” was considered. Under this approach, whether a particular institution would be excluded from BIA or CCAA proceedings would depend on whether it met the regulatory definition, which could ultimately be determined by a court. This approach was not retained because it would create uncertainty for PSEIs, creditors and other stakeholders that would need to assess the status of individual institutions. Given the differences across provincial and territorial post-secondary frameworks, this assessment could be difficult and could lead to disputes or litigation. It could also result in institutions being captured that were not intended to be covered, or institutions being excluded that should be covered. Second, a static schedule listing all prescribed public PSEIs was considered but not adopted. This option would be difficult to maintain, as institutions can be created, renamed, merged, dissolved, or have their status changed. Keeping such a list current would require monitoring and potentially frequent regulatory amendments, creating delays and an administrative burden on government while also risking the emergence of gaps in coverage for public PSEIs from regulations. Third, the proposed approach is to incorporate relevant PT legislation by ambulatory reference. This would provide greater certainty than a broad definition, while avoiding the maintenance burden of a static list. Stakeholders could easily determine whether an institution is prescribed by reference to the applicable PT framework. This approach would also better reflect PT jurisdiction over post-secondary education and would allow the BIGR and CCAR to remain current, in most cases, as PT frameworks evolve. That said, there could still be a need for regulatory updates when PTs create new legislative instruments, but this is expected to be infrequent. Regulatory analysis Benefits and costs Impacts of proposed regulatory amendments are assessed by comparing a baseline scenario to the proposed regulatory scenario. The baseline scenario reflects what would occur if the BIGR and CCAR were not amended, whereas the regulatory scenario reflects what would occur if the proposed amendments were made. The incremental impacts are the differences between these scenarios. Baseline scenario Without amendments to the BIGR and CCAR, no public PSEIs would be prescribed. As a result, the Bill C-59 amendments would not have a practical effect. Public PSEIs in financial distress could continue to commence proceedings under the Acts, and creditors could continue to initiate bankruptcy, receivership or restructuring proceedings against them under those Acts. This status quo would not achieve the policy intent of Bill C-59. There is also a risk of interpretive uncertainty, as the Acts would refer to prescribed public PSEIs, but the BIGR and the CCAR would not identify any such institutions. This could create confusion for PSEIs, creditors and other stakeholders. Regulatory scenario A clear and efficient method to identify the organizations that are excluded from the application of the BIA and the CCAA would be implemented in the BIGR and the CCAR. This clarity would avoid uncertainty regarding its applicability. Excluded public PSEIs would be able to quickly and easily determine their status and make alternative plans to restructure when faced with a risk of insolvency, given an inability to access CCAA and BIA options. PSEIs that are not considered public PSEIs for the purposes of the Acts would have certainty of their continued ability to use insolvency proceedings. Creditors would also be able to determine the status of educational institutions when deciding if they should lend money and under what terms. Costs of the proposal The costs of the regulatory proposal are expected to be minimal. The only cost for PSEIs and creditors is that they may need to review the BIGR and the CCAR and the PT legislation to determine whether a particular institution is prescribed. These costs are expected to be minor, as the proposed approach is intended to provide a clear and accessible method for determining the status of each institution. There would also be little to no cost to the Government. The proposed regulations would not require the Government to take or undergo any particular action, but simply give effect to certain provisions of insolvency law. Even to the extent that the Government is the steward of the proposed regulations, the proposed approach is intended to remain current in most cases by incorporating relevant PT legislation by ambulatory reference. However, some monitoring would still be required by ISED. Amendments to the BIGR and CCAR could be needed if a province or territory enacted new legislation, repealed existing legislation, or amended its framework in a way that would affect whether public PSEIs are properly captured. These circumstances are expected to be infrequent, and the associated monitoring and regulatory maintenance costs are expected to be minimal and could be absorbed by existing resources. Benefits of the proposal The main benefit of the proposal is that it would give effect to Parliament’s intent to exclude public PSEIs from the application of the Acts. The proposed amendments would also provide a clear and predictable framework for determining whether an institution is excluded. This would reduce uncertainty and limit the risk of disputes or litigation over whether a particular institution can access or be forced into proceedings under the Acts. Small business lens None of the prescribed institutions are small businesses. The costs imposed by the proposed regulations on small business creditors of PSEIs would be limited to the process of applying the definition within the BIGR and the CCAR to confirm whether a debtor would be excluded from the application of the Acts. Considering that the proposed amendments would allow them to easily identify whether a particular PSEI can become subject to insolvency proceedings, these costs are expected to be minimal and are incidental to the enactment of Bill C-59. One-for-one rule The one-for-one rule does not apply to this regulatory proposal, as there is no incremental change in the administrative burden to business and no regulatory titles are repealed or introduced. Regulatory cooperation and alignment The regulatory proposal ensures alignment of federal regulations with PT legislation, minimizing regulatory divergence within Canada. International obligations The regulatory proposal is not related to any trade or international agreements or obligations. Effects on the environment In accordance with the Cabinet Directive on Strategic Environmental and Economic Assessment, a preliminary scan concluded that a strategic environmental assessment is not required. Gender-based analysis plus No impacts based on gender and other identity factors have been identified for this proposal. Implementation, compliance and enforcement, and service standards Implementation To ensure the effective and efficient implementation of the proposed regulatory amendments, the Office of the Superintendent of Bankruptcy (OSB) would adopt a compliance promotion approach. The proposed regulations would come into force upon their registration, and a notice would be emailed to all licensed insolvency trustees (LITs), following their publication in the Canada Gazette, Part II, informing them of the regulatory amendments and outlining how these may affect their operations. Additionally, the OSB would publish information regarding the regulatory amendments on its own website for all other stakeholders to access. Officials of ISED may also bring the publication to the attention of particularly affected stakeholders by email. Compliance and enforcement The OSB has various compliance and enforcement strategies and policies to fulfil this part of its mandate. The OSB’s Compliance Framework outlines the OSB’s regulatory duties, sets out expected outcomes and objectives of compliance programs, and expands on the underlying approaches and strategies of compliance activities. A section of the framework outlines the OSB’s methods to ensure LITs and monitors comply with their duties under the Acts, the Code of Ethics under the BIA, and any duties the court imposes. The OSB also receives, records and investigates complaints made with respect to LITs and monitors. Additionally, the court is often heavily involved in CCAA proceedings and can address non-compliance when required. No new instruments are required. Contact Stakeholders are invited to provide feedback on the regulatory proposal directly on Canada Gazette’s Online Regulatory Consultation System (ORCS). Stakeholders can, however, address inquiries on the proposed regulations to the following: Strategic Policy Sector Innovation, Science and Economic Development Canada 235 Queen Street Ottawa, Ontario K1A 0H5 Email: mfpbconsultations-consultationsdgpcm@ised-isde.gc.ca PROPOSED REGULATORY TEXT Notice is given that the Governor in Council proposes to make the annexed Rules Amending the Bankruptcy and Insolvency General Rules (Public Post-Secondary Educational Institutions) under subsection 209(1) of the Bankruptcy and Insolvency Act footnote a. Interested persons may make representations concerning the proposed Rules within 30 days after the date of publication of this notice. They are strongly encouraged to use the online commenting feature that is available on the Canada Gazette website. However, if they use email, mail or any other means, the representations should cite the Canada Gazette, Part I, and the date of publication of this notice, and be sent to Strategic Policy Sector, Innovation, Science and Economic Development Canada, 235 Queen Street, Ottawa, Ontario K1A 0H5 (email: mfpbconsultations-consultationsdgpcm@ised-isde.gc.ca). Please note that as part of the prepublication process, all representations, including attachments, will be published on the Canada Gazette website, subject to its terms of use relating to the provision of comments. Ottawa, November 6, 2026 Max Kaplan Acting Assistant Clerk of the Privy Council Rules Amending the Bankruptcy and Insolvency General Rules (Public Post-Secondary Educational Institutions) Amendments 1 The heading before section 1 of the French version of the Bankruptcy and Insolvency General Rules footnote 1 is replaced by the following: Définitions et interprétation 2 The Rules are amended by adding the following after section 1: 1.01 Any reference in Schedule 2 to a provincial Act is a reference to that provincial Act as amended from time to time. 3 The Rules are amended by adding the following after section 1.2: 1.3 The institutions listed in Schedule 2 are prescribed as public post-secondary educational institutions for the purposes of the definition corporation in section 2 of the Act. 4 The schedule to the Rules is numbered as Schedule 1. 5 The Rules are amended by adding, after Schedule 1, the Schedule 2 set out in the schedule to these Rules. 6 The Rules are amended by replacing “the schedule” with “Schedule 1” in the following provisions: (a) the definition tariff in section 1; (b) paragraph 128(2)(c); and (c) paragraph 129(1)(f). Coming into Force 7 These Rules come into force on the day on which they are registered. SCHEDULE (Section 5) SCHEDULE 2 (Sections 1.01 and 1.3) Public Post-Secondary Educational Institutions Ontario 1 a publicly-assisted university as defined in section 1 of the Ministry of Training, Colleges and Universities Act, R.S.O. 1990, c. M.19 2 any colleges of applied arts and technology established under subsection 2(1) of the Ontario Colleges of Applied Arts and Technology Act, 2002, S.O. 2002, c. 8, Sched. F Quebec 3 any colleges established under section 2 of the General and Vocational Colleges Act, CQLR, c. C-29 4 any regional colleges established under section 31 of the General and Vocational Colleges Act, CQLR, c. C-29 5 any educational institutions at the university level referred to in paragraphs 1(1) to (10) of the Act respecting educational institutions at the university level, CQLR, c. E-14.1 Nova Scotia 6 Nova Scotia Community College, established under section 51 of the Community Colleges Act, SNS 1995-96, c. 4 7 any educational institution referred to in paragraph 2(1)(f) of the Universities Accountability and Sustainability Act, SNS 2015, c. 11 New Brunswick 8 St. Thomas University, established under section 1 of An Act to Incorporate Saint Thomas’ College, SNB 1934, c. 45 9 Maritime College of Forest Technology, constituted under section 3 of the Maritime College of Forest Technology Act, SNB 1978, c. 68 10 University of New Brunswick, continued under section 2 of the University of New Brunswick Act, SNB 1984, c. 40 11 Université de Moncton, continued under subsection 2(1) of the Université de Moncton Act, SNB 1986, c. 94 12 Mount Allison University, continued under subsection 2(1) of the Mount Allison University Act, 1993, SNB 1993, c. 78 13 corporations established under subsection 3(1) of the New Brunswick Community Colleges Act, SNB 2010, c. N-4.05 14 an institution as defined in section 1 of the Adult Education and Training Act, RSNB 2011, c. 101 Manitoba 15 a college as defined in section 1 of The Advanced Education Administration Act, C.C.S.M. c. A6.3 16 universities within the meaning of paragraphs (a) to (f) of the definition university in section 1 of The Advanced Education Administration Act, C.C.S.M. c. A6.3 17 Manitoba Institute of Trades and Technology, continued under subsection 2(1) of The Manitoba Institute of Trades and Technology Act, C.C.S.M. c. T130 British Columbia 18 an institution as defined in section 1 of the College and Institute Act, RSBC 1996, c. 52 19 Royal Roads University, continued under subsection 3(1) of the Royal Roads University Act, RSBC 1996, c. 409 20 universities referred to in the definition university in section 1 of the University Act, RSBC 1996, c. 468 21 Thompson Rivers University, continued under subsection 2(1) of the Thompson Rivers University Act, SBC 2005, c. 17 Prince Edward Island 22 Holland College, established under subsection 2(1) of the Holland College Act, R.S.P.E.I. 1988, c. H-6 23 University of Prince Edward Island, established under subsection 2(1) of the University Act, R.S.P.E.I. 1988, c. U-4 Saskatchewan 24 University of Regina, continued under subsection 3(1) of The University of Regina Act, RSS 1978, c. U-5 25 University of Saskatchewan, continued under section 3 of The University of Saskatchewan Act, 1995, SS 1995, c. U-6.1 26 regional colleges established under paragraph 3(1)(a) or subsection 32(2) of The Regional Colleges Act, SS 1986-87-88, c. R-8.1, or community colleges continued as regional colleges under subsection 31(1) of that Act 27 Saskatchewan Polytechnic, continued under subsection 3(1) of The Saskatchewan Polytechnic Act, SS 2014, c. S-32.21 Alberta 28 a public post-secondary institution as defined in paragraph 1(p) of the Post-secondary Learning Act, SA 2003, c. P-19.5 Newfoundland and Labrador 29 Memorial University of Newfoundland, continued under subsection 3(1) of the Memorial University Act, RSNL 1990 c. M-7 30 College of Newfoundland and Labrador, established under section 3 of the College Act, 1996, SNL 1996 c. C-22.1 Yukon 31 Yukon University, continued under section 2 of the Yukon University Act, SY 2019, c. 15 Northwest Territories 32 Aurora College, continued under section 2 of the Aurora College Act, RSNWT 1988, c. A-7 Nunavut 33 Nunavut Arctic College, continued under section 2 of the Nunavut Arctic College Act, C.S.Nu., c. 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